Greenfield is forecasting a “rapid shift” in consumer behavior. He believes that Disney is a cable company “at its core” and ESPN will become Disney’s “most troubled business.”
In an interview, Mr. Greenfield said he believed that “the expectations seem too high” for Disney. He expects the company’s stock to fall to $90 in the next 12 months; it closed Monday at $106.58.“It puts incredible pressure on the films. They all have to be massive successes. That’s just tough.” Mr. Greenfield is especially worried about earnings in 2017 and beyond, when he believes the cord cutting may push Disney to pursue an à la carte subscription offering, given that 44 percent of the company’s profits currently come from cable television.
ESPN has committed billions per year to lock down major sports rights through the next decade. The cable revolution, with a majority of consumers cutting their tv subscriptions in favor of a la carte programming, is not a question of if but when. That revolution will have ramifications for ESPN’s business model and for sports fans, who will absorb a greater cost burden.